Goldman, BofA to shrink SPAC biz; OCC eyes reform to bank merger review process

TOP NEWS IN BANKING & FINANCIAL SERVICES

* The Goldman Sachs Group Inc. is ceasing its involvement with most special purpose acquisition companies it took public and is halting new U.S. SPAC issuance over liability risk concerns stemming from tighter SEC disclosure rules for SPACs, Bloomberg News reported, citing people familiar with the matter. Bank of America Corp. is scaling back SPAC work as well, according to the news outlet. Citigroup Inc. has also reportedly paused underwriting IPOs for blank-check companies.

* The Office of the Comptroller of the Currency may require large banks seeking merger approvals to make commitments to resolve potential bank failures, acting Comptroller Michael Hsu said May 9. The standard would be intended to lessen the merger risks associated with too-big-to-fail financial institutions, Hsu said in a speech before the Brookings Institution. The financial stability requirement is part of an across-the-board effort to update the frameworks regulators use to analyze mergers, Hsu said.

➤ APAC banks beefing up tech budget to enhance IT resilience, digital readiness

The proliferation of digital financial services is pushing Asia-Pacific financial institutions to increase budgets for technology upgrades, particularly aimed at minimizing service disruption and improving digital capabilities, according to a 451 Research survey on technology adoption in the Asia-Pacific region fielded from Feb. 7 to March 4, 2022.

➤ Liberty Mutual, Nationwide boost homeowners rates in March

Liberty Mutual Holding Co. Inc. could see the largest cumulative increase in premiums from homeowners insurance rate hikes approved in March, according to an analysis by S&P Global Market Intelligence.

READ MORE about the market reaction and industry impact of the evolving situation in Russia and Ukraine in our new Issue in Focus.

EARNINGS SPOTLIGHT

Diebold Nixdorf Inc. and loanDepot Inc. reportedly quarterly results.

BANKING

* Citigroup warned in a regulatory filing that "certain U.S. regulators and authorities" were probing Citigroup Global Markets Inc. and other firms in connection with "business-related communications sent over unapproved electronic messaging channels" and that the unit was cooperating with the investigations. Additionally, the bank said its Russian unit that is up for sale posted first-quarter revenue of $32 million, down 6% year over year, "primarily driven by the impact of sanctions, the cessation of the acquisition of new accounts and a reduction in investment sales."

FINANCIAL SERVICES

* Strive Asset Management, an Ohio-based fund manager co-founded by investors Vivek Ramaswamy and Anson Frericks, launched May 9. The firm "aims to solve a fiduciary problem created by the three largest U.S. asset managers — BlackRock, Vanguard and State Street — which control over $20 trillion in assets," and to advance "Excellence Capitalism," which pushes American companies to focus on delivering excellent products and services rather than mixing business with politics, according to a press release.

* Chicago-based private credit provider Monroe Capital Corp. has engaged an adviser to explore options, including a sale of a stake in itself, Bloomberg reported, citing people with knowledge of the matter.

* Goldman Sachs investors suing the company over the 1MDB sandal are seeking the testimony of U.K.-based former employees Patrick Kidney, Toby Watson and Cyrus Shey, saying it is vital to the lawsuit's key claim that Goldman misled them about its involvement with the Malaysian fund and alleged scam mastermind Jho Law, Bloomberg reported, citing a court filing.

* Georgia-based Merit Financial Group LLC, doing business as Merit Financial Advisors, acquired Union Financial Advisors LLC, which provides financial planning services for small-business owners, retirees, medical professionals and business executives. The merger was finalized April 30.

POLICY AND REGULATION

* The U.S. SEC extended the public comment period on the proposed rule over climate-related disclosures to June 17 while reopening for public comment its proposed rules on private fund advisers and alternative trading systems.

* The Commodity Futures Trading Commission issued a proposed rule modifying its swap clearing requirement to remove certain clearing requirements tied to Libor and other interbank offered rates, and replace them with similar clearing requirements for swaps referencing overnight, nearly risk-free reference rates.

* The Consumer Financial Protection Bureau affirmed in a published advisory opinion that the Equal Credit Opportunity Act bars lenders from discriminating against customers after they have received a loan, not just during the application process.

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